More woe at Nokia as stock falls on plan to cut one in five jobs

 
City A.M. Reporter
LOSS-MAKING Finnish mobile phone producer Nokia plans to cut another 10,000 jobs globally in its biggest revamp in recent history, it announced yesterday, while warning that the second-quarter loss from its mobile phone business would be larger than expected.

The cuts, which include the closure of Nokia’s only plant in Finland, bring total planned job cuts at the group since Stephen Elop took over as chief executive in 2010 to more than 40,000. Nokia said that it would book additional restructuring charges of around €1bn by the end of 2013.

The company, whose cash position is increasingly scrutinised by investors, also said restructuring-related cash outflows would be around €650m in the remaining three quarters of 2012 and around €600m in 2013.

Nokia stock has crashed more than 70 per cent since it announced in February 2011 that it was dropping its own Symbian smartphone operating software and switching to Microsoft’s largely untried Windows Phone system.

“These changes underline the seriousness of the challenges Nokia is facing, particularly in light of the eye-watering competition from Apple and Samsung,” said Ben Wood, head of research at CCS Insight.

Nokia also said it would sell luxury phone business Vertu to venture firm EQT.

Shares in Nokia extended their losses yesterday, closing 18 per cent down at 16.08 Swedish krona.